Interest rates are now on the way back up. The European Central bank last week again put up its base interest rate - to 3.5 per cent, a full percentage point above the lows of last year. Most economists believe they will be at least 4 per cent, if not 4.5 per cent, by the end of the year. Some say they could reach that level by the end of the summer.

Within a few weeks most of the major lenders will have passed on the previous rise. But a few held fire. These include AIB and TSB's Tusa, which are now likely to pass on both rises at once. However, AIB's head of mortgages has said that the bank will remain competitive.

In fact many of the other lenders are secretly delighted with AIB's policy of closely marking the new entrants to the markets, particularly Bank of Scotland. This week AIB's rate stood at 3.99 per cent, Bank of Scotland's at 3.94 per cent and Tusa's 3.75 per cent.

Some of the more traditional mortgage lenders simply did not have deep enough pockets to continue with such tight margins. For example, Tusa's recent rate was 3.75 per cent. Of course, because it is a new entrant, that is only for new business. Nonetheless, it is still significantly below TSB's own rate of 4.6 per cent. The same is true of Bank of Scotland where the margins are slightly below those prevailing in the UK.

The domestic lenders are hoping that by closely matching Bank of Scotland's offering, AIB is limiting the amount of business going in the Scots' direction. So far it is not clear whether or not this is happening as official figures are hard to come by. But it seems that AIB, Bank of Scotland and Tusa are likely to remain among the cheapest lenders. Others such as Bank of Ireland are in a more difficult position. They put up interest rates only nine days before the most recent announcement from the ECB. They must be kicking themselves: if they had held off, both rises could have been put in together and they would not have suffered the ignominy of telling customers two months in a row that their repayments are going up.

Of course, if Bank of Ireland decides that the next hike from the ECB will be in April it could well decide to hold off and do last week's and the April rise together. But many analysts are predicting that the ECB will wait until May: after all it needs to give growth in countries like Germany and France some chance.

Bank of Ireland's rate at the time of writing was 4.6 per cent, about around the same level as Irish Permanent. The exact timing of the announcements of course depends on how much notice the lender needs to adjust the systems for a certain months' payments.

Repayments on a £100,000 mortgage have thus been increasing and will continue to do so. Late last year, at 3.89 per cent, the repayment over 20 years would have been £600. At 4.6 per cent that had risen to £638.

If rates continue to rise a rate of 5.1 per cent would mean repayments of £665, a possible rise of £65 a month over a year. That underlines the sense of the message from the EBS: borrowers should remember to leave a cushion for rising rates when working out how much they can afford to repay on their loan.